Shows how a company uses the fixed assets that are involved in producing a product or service.
How to calculate . Profit / Cost of fixed assets × 100%.
Fixed assets are the material assets of an vietnam telegram database organization that form the production base.
The calculation allows you to determine the depreciation of the material base in time, carry out modernization or even sell unnecessary assets.
Breakeven point
Allows you to understand how to plan the volume of production and sales so as not to "go into the red". Calculated using the formula:
Fixed Costs / (Revenue - Variable Costs) × 100%
Profitability and CAGR
The CAGR formula allows you to determine the average annual growth rate. It estimates how quickly, on average, this parameter has grown each year over a given period.
The main thing is the analysis and forecasting of the rate of growth of profitability.
Calculation: CAGR = (Final Profit/Initial Profit) ^ (1/Number of Years) − 1.
How CAGR is used in calculations:
when the average annual increase in asset value is determined;
when sales volume growth is calculated;
when a forecast of investment returns in the near future is needed.
IRR and DCF
IRR is a standard that allows you to determine how profitable an investment will be.
A businessman will be able to calculate the rate at which he can attract funds. Thanks to IRR, investors can choose worthy projects from which they can expect a positive effect on the invested money.
DCF is a more complex method of analyzing the company's activities. It allows you to estimate how much the business is actually worth. It is based on the time value of money. It is used for organizations that have been operating for two years.
The idea is to take into account the time value of money by referring to historical sales data and applying an average growth rate.